By Rachelle Younglai and Thomas Ferraro
WASHINGTON (Reuters) – The U.S. government braced on Friday for the possibility of a partial shutdown of operations on October 1 as Congress struggled to pass an emergency spending bill that Republicans want to use to achieve Tea Party-backed goals, such as defunding the new healthcare reform law.
While there was still a chance of averting a shutdown, time was running out.
Indicative of lawmakers’ desperation, some mulled the possibility of passing a bill to keep the government running for a very short period of time, 10 days or so, to avert a shutdown and provide more time to work out a longer-term deal.
Representative Shelley Moore Capito of West Virginia, a senior House Republican, told Reuters: “People are talking about a 10-day CR,” a so-called continuing resolution to fund the government through October 10.
That could put the subsequent temporary funding bill on a similar timetable to a debt limit increase Congress must pass or risk a government default on its loans.
House Democratic leader Nancy Pelosi, during a press conference, warned Republicans against lumping those two measures together. “It’s two different subjects,” she said.
The Senate on Friday was on track to pass legislation keeping the U.S. government operating beyond midnight on Monday.
But doubt remained about how and when it would be received in the Republican-controlled House of Representatives, where Republicans feuded over a plan that would both please supporters of the conservative Tea Party movement and avert widespread agency shutdowns.
A shutdown would likely result in up to 800,000 federal employees being furloughed. Most visible to the public, if past shutdowns are a guide, are museum closings in Washington that outrage tourists and attract television cameras, and possible delays in processing tax filings, for example.
But the government does not grind to a halt.
Large swaths of “essential” activity continue, including benefit checks and national security-related operations. Agencies were in the process of determining which employees would be considered essential and which not.
REPUBLICANS FIGHTING OBAMACARE
“Obamacare,” the healthcare reform law set for launch on Tuesday, would continue to be implemented, beginning a period of open enrollment for individuals to purchase insurance.
Concern over fiscal negotiations in Washington sent the dollar close to a seven-month low and pressured world equities on Friday.
The impasse has sent the cost of insuring against a U.S. sovereign default to its highest level in four months. U.S. stocks fell in early trading on Friday as worries grew over Washington’s gridlock. Concern over fiscal negotiations sent the dollar close to a seven-month low.
As lawmakers stared down the midnight Monday deadline when the current fiscal year ends – and government funding along with it – the Democratic-led Senate was set to deliver on President Barack Obama’s call for an emergency funding bill with no add-ons, such as defunding the healthcare law.
The House could vote on that measure in an unusual Saturday session. But all indications were it would tack on a new measure to that bill, which likely would be rejected by the Senate and make a shutdown all the more likely.
One House Republican aide, who asked not to be identified, said leaders were weighing attaching a one-year delay of the healthcare law to the spending bill, “but that’s not set in stone.”
A feel of desperation seeped through the Capitol, even though many held out hope that a last-minute deal could be struck to avoid shutting down activities ranging from school lunch programs for poor children and paying U.S. troops to foreign embassy operations and some airport security screenings.
“Holy God, you created us for freedom, so keep us from shackling ourselves with the chains of dysfunction,” intoned Senate Chaplain Barry Black at the opening of Friday’s Senate session.
DEBT CEILING FIGHT LOOMS
Earlier, Republican Senator John McCain blamed members of his own party for the difficulties in passing legislation to fund the government beyond Monday. Congress also faces the hard task of raising the limit on federal borrowing authority, which Republicans are targeting for controversial add-ons.
Without a debt limit increase by October 17, Treasury Secretary Jack Lew has warned, the United States would have a difficult time paying creditors and operating the government.
“We are dividing the Republican Party rather than attacking Democrats. We are now launching attacks against Republicans … so it’s very dysfunctional,” McCain said on the CBS program “This Morning.”
McCain and a band of other more moderate Republicans are expected to join in with Democrats later on Friday to pass a stripped-down bill to fund the government until November 15, giving Congress more time to come up with a budget measure running through September 30, 2014, the end of the fiscal year that starts on Tuesday.
Tea Party conservatives’ insistence on using these two important fiscal bills to advance their small-government agenda comes as a new Gallup Poll shows the country’s patience with them could be wearing thin, even though there still are a significant number of supporters.
According to the survey, 22 percent of U.S. adults think of themselves as supporters of the movement.
That is down 10 points from the apex of Tea Party popularity in 2010, when they influenced enough elections to return House control to Republicans.
House Republican leaders early on Friday were either still undecided on how to handle the unfolding crisis in Washington or were not giving any clues.
“We’re still waiting for the Senate to act,” said one House Republican leadership aide.